Consumer support for CSLR

There is widespread consumer support for passage of the compensation scheme of last resort with 73% of consumers supporting a compensation scheme for victims of financial misconduct.

According to a survey from consumer advocacy group Choice, 81% agreed victims of finance investment scams should receive compensation if they lost money.

There had been eight consumer groups that joined eight financial planning industry bodies in support for the bill.

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However, these planning bodies had pushed for product manufacturers to be held financially accountable, as did the Association of Independently Owned Financial Professionals.

Patrick Veyret, Choice banking policy adviser, said the Australian community had not forgotten the scandals of the Banking Royal Commission.

“However, it’s been two and a half years since the Federal Government committed to cleaning up the banking industry,” Veyret said.

“Many victims remain without the compensation they deserve while many banking executives have got off scot-free.

“In February 2019, the Federal Government committed to establishing an industry-funded compensation scheme for victims of financial misconduct.

“The scheme has widespread public support with almost three quarters of Australians supporting its establishment.”

Veyret said for many, compensation was the difference between living a secure retirement and facing a life on the aged pension in the insecure private rental market.

“Justice delayed is justice denied. Over 1,300 people have had their complaints and compensation awarded paused until the Government passes the scheme. People have lost their entire life savings and are stuck in limbo,” Veyret said.

The survey found there was strong support for personal fines for finance executives when they break the law (90%), while trust in executives to treat customers fairly remained at very low levels (15%). 

“The Australian community expects that banking executives are held to account when misconduct occurs under their watch,” Veyret said.

“Executives who appeared before the Royal Commission admitted to targeting vulnerable consumers with harmful products yet not a single banking executive was prosecuted.

“If designed correctly, the new Financial Accountability Regime will hold finance executives to account, ensuring customers are treated fairly.”

Legislation was expected to be debated as early as next week, with the Federal Government aiming to pass both bills by the end of the year.

“By passing these two important laws, the Federal Government has an opportunity to right some of the wrongs of the Banking Royal Commission” Veyret said.

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